With an unexpectedly stellar year for investment markets behind us, what’s in store for the year ahead? Certified Financial Planner Paul Fain provides eight financial predictions for 2018.
CAN THE U.S. ECONOMY STAY ON A ROLL?
- U.S. ECONOMY ↑: Will grow and remain near 2.5%. The U.S. economy has greater momentum than it has had in several years.
- UNEMPLOYMENT ↓: will stay low <4%
- GLOBAL GROWTH ↑: all 45 countries tracked by the Organization for Economic Cooperation and Development are expected to show economic growth.
WHAT ABOUT INTERESTS RATES, WILL WE SEE MORE RATE INCREASES FROM THE FED?
- INTEREST RATES ↑: The Fed will likely raise rates 2-3 times.
WHAT WILL THAT MEAN FOR CONSUMER DEBT?
Catch-22
- CONSUMER CREDIT SCORES ↑: Credit scores will peak – low unemployment, economic growth, negative records from the Great Recession are still falling off consumers’ credit reports. Charge-offs and bankruptcies stay on credit reports for seven years and ten years.
- CREDIT CARD DEBT RECORD ↑: U.S. consumers will likely owe more credit card debt than ever before. $1 trillion mark. Increased late payments
CAN THE STOCK MARKET RISE HIGHER?
- STOCKS ↑: Corporate earnings are strong. Corporate tax rates are falling. Expect 5-10% gains.
- VOLATILITY ↑: stock prices becoming pricey and vulnerable to bad news.
…BUT ALL SAID, FORECASTING IS NOT EXACT SCIENCE IS IT!?
- Foresight leads to preparedness, and being prepared really pays off when it comes to personal finance.
- Pay off credit cards.
- Buy a home or refinance.
- Don’t be greedy in the stock market.
- Expect corporate gluttony to arise.
